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THURSDAY, APRIL 13, 2017
$4.10 IDB: Bahamas ‘can’t escape’ $7bn debt without fiscal rules By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net The Bahamas and o ther Caribbean nations “canno t escape their debt challenges” witho ut implementing so-called fiscal rules, an Inter-American Development Bank (IDB) study recommending this nation impose spending controls. An IDB paper on developing fiscal sustainability in small states argued that limiting the Go vernment’s recurrent (fixed cost) and to tal spending, in order to bring the Budget back in line with a target debt-toGDP ratio, wo uld generate “higher consumer welfare in the Bahamas” than any o ther option. The paper’s authors, Allan Wright, Kari Granade and Ankie Sco tt-Joseph, effectively warned that the Bahamas will be unable to effectively tackle its $7 billion national debt burden unless it imposes discipline on successive go vernments thro ugh binding rules. “This study contends that Caribbean co untries canno t adequately surmo unt their fiscal and debt challenges in the absence o f binding rules that are geared to ward entrenching fiscal discipline, curbing fiscal procyclicality, and impro ving budget transparency and credibility,” the IDB paper’s authors wro te.
Study calls for ‘spending controls’ imposed on Govt Best method for shrinking Govt’s size And gives ‘highest consumer welfare’ of all options “Given the persistence and scale o f the fiscal and debt pro blem in many Caribbean co untries, the authors view the urgent adoption o f fiscal rules as a critical development priority for the Caribbean. “Improving fiscal governance and strengthening institutions are imperative not only to curb fiscal procyclicality and reduce indebtedness, but also to restore medium-term fiscal sustainability to better support socioeconomic development.” The IDB study said ‘ fiscal rules’ are intended to promote sustainable economic growth, while at the same time limiting government budget deficits and the growth of the national debt. It added that there were several types of fiscal rules, most involving set debtto-GDP ratio or balanced Budget targets - both of See pg b12
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Matthew ‘doubles, trebles’ Fidelity fund withdrawals By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net RoyalFidelity has seen withdrawals from its investment funds “double, sometimes treble” above normal levels in recent months after Hurricane Matthew sent investors scrambling for funds to effect repairs. Joseph Euteneuer, the investment bank’s mutual fund manager, yesterday told Tribune Business that the storm, combined with election uncertainty and sliding share prices for the funds’ key holdings, had all impacted 2017 first quarter performance.
Investors scramble to cash in holdings for repairs Merchant bank’s funds also hit by election nerves Two funds down to end-March, as key stocks slide He revealed that RoyalFidelity’s Targeted Equity Fund, which focuses on equity investments in listed companies, had produced a negative -2.81 per cent return through to end-March
Joseph Euteneuer 2017. Its Secure Balanced Fund, featuring a mixed equity/fixed income investment portfolio, had generated a negative -3.4 per cent return for the same period,
although its Prime Income Fund was up 1.09 per cent. Mr Euteneuer, though, emphasised that the yearto-date performance of RoyalFidelity’s investment fund family “shouldn’t alarm investors at all”, provided they were looking at long-term returns rather than short-term gain. He added that subscriptions (incoming investments) were starting to “balance off” the redemptions experienced postMatthew, and expressed optimism that the funds would enjoy “modest growth in assets” for 2017. “One of the factors that has definitely affected the funds is the number of See pg b7
FamGuard, partner front-runners for NHI insurer deal
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
Family Guardian and its international partner, Aetna, were yesterday said to have emerged as the front-runners to land the contract to manage the National Health Insurance’s (NHI) public insurer. Multiple healthcare and insurance industry sources, speaking on condition of
anonymity, told Tribune Business that the BISX-listed insurer’s BahamaHealth subsidiary and Aetna were the leading contender to operate Bahama Care. This newspaper was told that Family Guardian/ BahamaHealth staff have been informed internally that the NHI public insurer contract will be awarded to them, although there has been no public confirmation to-date.
Lyrone Burrows, Family Guardian’s president, was yesterday said to be in meetings, and did not return Tribune Business calls seeking comment. Aetna, the US-based insurer with more than $60 billion in revenues, acts as the BISX listed firm’s international claims administrator and care co-ordinator when Bahamian policyholders travel for overseas treatment. See pg b10
Govt ready to launch NHI without private insurers BIA chair: ‘We can’t engage without regulations’ Key elements of scheme still not in place
Credit Bureau ‘eye opener’ for debt-laden Bahamians By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
The proposed Credit Bureau will be an “eye opener” for many Bahamian consumers when it exposes just how heavily indebted they are, the Central Bank’s governor said yesterday. John Rolle told Tribune Business that legislation for the Bahamas Credit Bureau’s creation is in its final draft form, with the next government tasked with bringing it to Parliament. “The Credit Bureau is even more relevant in terms of moving forward and opening up the market to an easier flow of financing,” Mr Rolle said. “The legislation is in final See pg b12
Governor warns of ‘cooling-off’ for overleveraged Legislation now in final draft form
Your Homegrown, Home-owned Bank John Rolle
‘Global disruption’ to impact local insurers By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net Bahamas First’s top executive has warned that local insurers are likely to face increasing competition from consumers acquiring coverage online, as the underwriter’s gross and net premiums declined 3 per cent in 2016. Patrick Ward told See pg b11
wishes you a happy and blessed Easter!
Bahamas First chief eyes online competition Carrier’s gross, net premiums down 3% in 2016 Plans motor insurance product upgrade for 2017
Bank of The Bahamas Limited www.BankBahamas.com
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